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What’s the Matter With Iowa? Dark News From Red-State America

Posted on Mar 18, 2017

By Paul Street

  Lightning strikes above the Iowa Capitol in Des Moines. (Brian Abeling / CC 2.0)

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What is the real cost of being poor? The federal minimum wage of $7.25 an hour is a cruel joke. If it had kept pace with increases in U.S. labor productivity since the 1970s, it would be $19 an hour today. Assuming full-time, year-round employment, the current minimum wage yields $15,131 per year, well below the federal poverty level for a three-person family ($20,160).

That’s why 29 states have increased their minimum wage beyond the federal level, with bottom hourly standards ranging from $7.70 in Missouri to $10 in Arizona, California, Connecticut and Vermont and $11 in Washington and Massachusetts. In the District of Columbia, the figure is $11.50, and will rise to $15 in 2020.

The poverty level is another cruel measure. It is based on an antiquated 1950s formula that multiplies a minimum food budget three times. Like the federal minimum wage level, the poverty level is not adjusted for significant variations in the cost of living across the nation.

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What does it cost just to get by today? The family budget calculator of the Economic Policy Institute (EPI) shows that the annual expense of adequate, no-frills living for two parents with two children in Iowa City (the most expensive city in the state of Iowa) is $67,710. This sounds high until you add up the monthly expenses: housing ($851), food ($782), child care ($1,046), transportation ($608), health care ($843), other necessities ($789), and taxes ($724), for a total monthly outlay of $5,643. (As a resident of Iowa City for the past decade, I find these estimates low.) The basic two-parent-two-kid family budget is lower but still daunting in rural Iowa ($60,650) and other Iowa cities such as Davenport ($61,792), Des Moines ($63,741) and Council Bluffs ($66,064).

The cost of a decent living diverges much more widely across the United States. The national cost of just getting by, as measured by the EPI, is $59,852 in Hibbing, Minn. (Bob Dylan’s hometown), $60,246 in rural Arkansas, $69,636 in Minneapolis, $71,995 in Chicago, $85,793 in Boston, $91,785 in San Francisco, $98,722 in New York City and $106,493 in Washington, D.C. In the nation’s capital, the recent new minimum wage puts the earnings of two full-time, year-round workers at 42 percent of the city’s basic family budget.

Keep the EPI’s figures in mind next time the U.S. Chamber of Commerce or the American Enterprise Institute expresses horror at the notion that the minimum wage should go as “astronomically” high as $15 an hour. That would mean $30,000 a year for a full-time worker fortunate enough to stay employed year-round. In rural Iowa, two parents working full-time at that supposedly exorbitant wage would still fall short of an adequate standard of living. In Iowa City, those parents would be more than $7,000 short.

HF295: Like Something Out of Dickens

Responding to the stark penury of the federal minimum wage and to differences in the cost of living, elected boards staffed mainly by Democrats in four Iowa counties recently have increased their minimum wages to $10 an hour. Johnson County, home to Iowa City, is already at $10. The three other counties—Polk (home to Des Moines), Linn (Cedar Rapids) and Wapello (Ottumwa)—are scheduled to hit that mark at the beginning of 2019.

The $10 minimum is a real step forward, but it translates to just $20,000 a year. Two parents with two children working full-time and year-round at $10 an hour come in at less than two-thirds of the EPI’s modest basic family budget cost.

But for the reigning Republicans in Iowa, where the GOP now controls both the governor’s office and the state legislature, that’s just too kind to full-time workers at the bottom of the wage scale. The state House recently passed legislation, House File 295 (HF295), that would nullify the recent county-level minimum wage increases and prohibit local and county jurisdictions from passing such measures in the future. It’s like something out of Charles Dickens.

The Center for Worker Justice of Eastern Iowa has asked Johnson County employers to “stand up for our workers, and our values, and pledge that you will continue to honor the Johnson County minimum wage—no matter what the politicians in Des Moines decide.” That’s a modest request.

Red States Versus Blue Cities

It’s part of a bigger national story. As of last February, more than 40 U.S. cities and counties had enacted local minimum wage ordinances to address the inadequacies of federal and state minimum wage laws as well as differences in the cost of living. Under a measure passed by the Seattle City Council two years ago, that city’s minimum wage will be $15 in 2021. Other cities, including Baltimore and Minneapolis, also are considering hikes to $15.

Big business has swiped back at these local initiatives. Under pressure from corporations and the lobbyists and right-wing think tanks they pay for, 23 states have passed laws that “preempt” cities from passing their own local minimum wage laws. In 2016, for example, Alabama passed a preemption bill after the city of Birmingham passed a local minimum wage law. The legislation blocks future local minimum wages and invalidates Birmingham’s measure.

Republican-controlled North Carolina has lost hundreds of millions of dollars due to an economic boycott sparked by its passage of House Bill 2 (HB2), widely known as “the bathroom bill.” The bill achieved notoriety by requiring transgender people to use bathrooms consistent with the gender listed on their birth certificates. But a less-known part of the “Public Facilities Privacy and Security Act” also removes the ability of city and county officials to set minimum wage standards for private employers.

The rash of preemption bills is concentrated in Republican-controlled states largely in the South. A national map highlighting these states in red shows that preemption bills recently passed in every Southern state except Arkansas, Virginia and West Virginia. (The non-Southern preemption states include Wisconsin, Michigan, Ohio, Indiana, Pennsylvania, Idaho, Colorado and Utah.)

The “Patchwork” and “Competitiveness” Ruses

Why such vicious legislation? In Iowa, as across the nation, Republicans pushing for the preemption of local minimum wage ordinances typically claim to be concerned about having a hodgepodge of wage levels across the state. HF295 sponsor Iowa House Rep. John Landon, R-Ankeny, channels the standard Republican conventional wisdom when he says that his measure seeks to create “a level playing field” in all Iowa communities. He told The (Cedar Rapids) Gazette: “This comes because of the patchwork effect that it creates on trying to operate businesses that are multicounty, that are multistate. It makes it difficult to keep track of each and every initiative that is passed that would impact that business as far as wages or other conditions.” Preemption proponents also argue that cities and counties become less competitive with surrounding areas when they implement a higher local minimum wage.

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